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Star Bulk Carriers Corp. Reports Financial Results for the Second Quarter and First Half of 2014

ATHENS, GREECE--(Marketwired - Aug 20, 2014) - Star Bulk Carriers Corp. (the "Company" or "Star Bulk") (NASDAQ: SBLK), a global shipping company focusing on the transportation of dry bulk cargoes, today announced its unaudited financial and operating results for the second quarter and the first half of 2014.

Financial Highlights

(Expressed in thousands of U.S. dollars, except for daily rates and per share data)

3 months ended June 30, 2014

3 months ended June 30, 2013

6 months ended June 30, 2014

6 months ended June 30, 2013

Total Revenues

$

24,746

$

17,379

$

44,925

$

35,818

EBITDA (1)

$

5,351

$

8,204

$

12,092

$

16,892

Adjusted EBITDA (1)

$

9,596

$

8,401

$

17,392

$

17,135

Net income / (loss)

$

(2,992

)

$

806

$

(3,870

)

$

1,964

Adjusted Net income / (loss)

$

2,836

$

2,587

$

4,579

$

5,357

Earnings / (loss) per share basic and diluted

$

(0.10

)

$

0.15

$

(0.13

)

$

0.36

Adjusted earnings/ (loss) per share basic

$

0.10

$

0.48

$

0.16

$

0.99

Adjusted earnings/ (loss) per diluted

$

0.10

$

0.47

$

0.16

$

0.98

Average Number of Vessels

17.0

13.1

16.4

13.6

Time Charter Equivalent Rate (TCE)

$

14,018

$

14,273

$

14,172

$

14,301

Average OPEX per day per vessel

$

5,208

$

5,664

$

5,410

$

5,596

Average daily Net Cash G&A expenses per vessel (2)

$

1,288

$

1,477

$

1,377

$

1,489

(1)

See the table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to Net Cash Provided by Operating Activities, which is the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").

(2)

Average daily Net Cash G&A expenses per vessel is calculated by deducting Management fee Income from General and administrative expenses (net of stock based compensation expense and one off transaction cost incurred in connection to the Merger) and then dividing with ownership days.

Petros Pappas, CEO of Star Bulk, commented:"Today we announce our financial results for the second quarter and first half of 2014. Despite the soft freight market during the second quarter of 2014, Star Bulk reported an Adjusted Net Profit of $2.8 million or $0.10 per share and a free cash flow of $2.5 million for this period. Our solid performance was driven by the increase in our operating fleet versus last year, as well as the continuous cost containment of operating expenses and corporate overhead. Average daily Opex for the second quarter of 2014 are reduced by 8% in comparison with the second quarter of 2013, while our average daily net cash G&A expenses are also reduced by 13% during the same period.

"I would liketo note that the above performance does not yet include the effects of the previously announced merger of Star Bulk and Oceanbulk entities, which closed successfully on July 11, 2014 and the results of which will be fully incorporated in the financial statements of the third quarter of 2014.

"Furthermore, we announcedyesterday, the 'en bloc' acquisition of a quality fleet of 34 vessels from entities controlled by affiliates of Oaktree Capital Management LP and Angelo Gordon & Co for a total consideration of $634.91 million, out of which $288.39 million will be paid in cash and the remainder through the issuance of 29.917 million shares of common stock of Star Bulk. The majority of the cash portion of the consideration will be financed under a new $231 million secured bridge loan facility extended to the Company by entities affiliated with Oaktree Capital Management, L.P and Angelo Gordon & Co. The large majority of these vessels are built in first tier shipyards in Japan and Korea, while this acquisition will bring our owned fleet to 103 vessels on a fully delivered basis with aggregate cargo carrying capacity of 11.85 million dwt, further cementing Star Bulk as the largest U.S. listed dry bulk owner and operator.

"I personally feel excitedregarding the overall transformation of Star Bulk through the last 2 years, while I believe that both transactions were executed in a prudent, transparent, fair and equitable manner for all the parties involved. Star Bulk has acquired a total fleet of 75 modern and high quality vessels, while deploying a minimal amount of existing cash resources. Furthermore, we have refrained from the use of excessive leverage on these transactions, but instead relied mostly on equity issuances on a net asset value to net asset value basis.

"Going forward our focusremains on integrating the newly acquired fleet into our highly efficient platform, while we will continue to monitor and assess the market for further accretive growth opportunities. We view that the recent softness of the freight market provides attractive points of entry, especially if we take into account the attractive demand dynamics of the iron ore trade and the contained vessel supply growth over the next 2 years.

"Overall we viewthat dry demand bulk fundamentals remain intact, as additional high quality, low cost iron ore mining capacity continues to come on line in Australia and most importantly Brazil, over the next 2 years, while coal trade will be further boosted from increased Indian seaborne imports.

The following tables present summary information relating to our existing fleet, our newbuilding vessels and the third party vessels under our management as of August 20, 2014:

Existing On the Water Fleet Profile (As of August 20, 2014)

Vessel Name

Vessel Type

Capacity (DWT)

Year Built

1

Peloreus

Capesize

182,000

2014

2

Obelix

Capesize

181,433

2011

3

Pantagruel

Capesize

180,181

2004

4

Star Borealis

Capesize

179,678

2011

5

Star Polaris

Capesize

179,600

2011

6

Big Fish

Capesize

177,662

2004

7

Kymopolia

Capesize

176,990

2006

8

Big Bang

Capesize

174,109

2007

9

Star Aurora

Capesize

171,199

2000

10

Star Mega

Capesize

170,631

1994

11

Star Big

Capesize

168,404

1996

12

Amami

Post Panamax

98,681

2011

13

Madredeus

Post Panamax

98,681

2011

14

Star Sirius

Post Panamax

98,681

2011

15

Star Vega

Post Panamax

98,681

2011

16

Pendulum

Kamsarmax

82,619

2006

17

Mercurial Virgo

Kamsarmax

81,545

2013

18

Magnum Opus

Kamsarmax

81,022

2014

19

Tsu Ebisu

Kamsarmax

81,001

2014

20

Star Challenger

Ultramax

61,462

2012

21

Star Fighter

Ultramax

61,455

2013

22

Maiden Voyage

Supramax

58,722

2012

23

Strange Attractor

Supramax

55,742

2006

24

Star Omicron

Supramax

53,489

2005

25

Star Gamma

Supramax

53,098

2002

26

Star Zeta

Supramax

52,994

2003

27

Star Delta

Supramax

52,434

2000

28

Star Theta

Supramax

52,425

2003

29

Star Epsilon

Supramax

52,402

2001

30

Star Cosmo

Supramax

52,247

2005

31

Star Kappa

Supramax

52,055

2001

Two of the following (1):

32

ABYO Angelina

Kamsarmax

82,987

2006

33

ABYO Gwyneth

Kamsarmax

82,790

2006

ABYO Oprah

Kamsarmax

82,551

2006

Total DWT:

3,305,100

(1)

Two of the three vessels will be distributed to Star Bulk from Heron in connection with the Heron Transaction

Acquisition fleet to be delivered

Vessel Name

Vessel Type

Capacity
(dwt.)

Year Built

Shipyard

1

Christine

Capesize

180,300

2010

Koyo Dock Japan

2

Sandra

Capesize

180,300

2008

Koyo Dock Japan

3

Iron Miner

Capesize

177,900

2007

SWS China

4

Lowlands Beilun

Capesize

170,200

1999

Halla Korea

5

Iron Beauty

Capesize

164,900

2001

CSBC China

6

Kirmar

Capesize

164,200

2001

CSBC China

7

Iron Bradyn

Kamsarmax

82,500

2005

Tsuneishi Japan

8

Iron Manolis

Kamsarmax

82,500

2007

Tsuneishi Japan

9

Pascha

Kamsarmax

82,500

2006

Tsuneishi Japan

10

Coal Gypsy

Kamsarmax

82,500

2006

Tsuneishi Japan

11

Coal Hunter

Kamsarmax

82,500

2006

Tsuneishi Japan

12

Iron Anne

Kamsarmax

82,500

2006

Tsuneishi Japan

13

Iron Brooke

Kamsarmax

82,500

2007

Tsuneishi Japan

14

Iron Fuzeyya

Kamsarmax

82,500

2006

Tsuneishi Japan

15

Iron Vassilis

Kamsarmax

82,500

2006

Tsuneishi Japan

16

Ore Hansa

Kamsarmax

82,500

2006

Tsuneishi Japan

17

Santa Barbara

Kamsarmax

82,500

2006

Tsuneishi Japan

18

Iron Bill

Kamsarmax

82,500

2006

Tsuneishi Japan

19

Iron Kalypso

Kamsarmax

82,500

2006

Tsuneishi Japan

20

Iron Lindrew

Kamsarmax

82,500

2007

Tsuneishi Japan

21

Grain Express

Panamax

76,500

2004

Tsuneishi Japan

22

Grain Harvester

Panamax

76,500

2004

Tsuneishi Japan

23

Iron Knight

Panamax

76,500

2004

Tsuneishi Japan

24

Isminaki

Panamax

74,600

1998

Sasebo Japan

25

Angela Star

Panamax

73,800

1998

Sumitomo Japan

26

Elinakos

Panamax

73,800

1997

Sumitomo Japan

27

Rodon

Panamax

73,700

1993

Hyundai Heavy Industries Korea

28

Coal Pride

Panamax

72,500

1999

Imabari Japan

29

Happyday

Panamax

71,700

1997

Hitachi Korea

30

Birthday

Panamax

71,500

1993

Hitachi Korea

31

Powerful

Panamax

70,100

1994

Hudong China

32

Fortezza

Panamax

69600

1993

Tsuneishi Japan

33

Emerald

Handymax

45600

1998

Tsuneishi Japan

34

Princess 1

Handymax

38,900

1994

I.H.I Japan

Total dwt:

3,158,100

Newbuilding Vessels

Vessel Name

Vessel Type

Capacity (DWT)

Shipyard

Country

Expected Delivery
Date

1

HN 214 (tbr Leviathan)

Capesize

182,000

JMU

Japan

September 2014

2

HN 5016 (tbr Indomitable)

Capesize

182,160

JMU

Japan

October 2014

3

HN 1061

Ultramax

64,000

New Yangzijiang

China

January 2015

4

HN 1063

Ultramax

64,000

New Yangzijiang

China

January 2015 (1)

5

HN 1062

Ultramax

64,000

New Yangzijiang

China

February 2015 (1)

6

HN 5017

Capesize

182,000

JMU

Japan

March 2015

7

HN 164 (tbr Honey Badger)

Ultramax

61,000

NACKS

China

March 2015 (1)

8

HN NE 165

Ultramax

61,000

NACKS

China

March 2015 (1)

9

HN NE 166

Newcastlemax

209,000

NACKS

China

April 2015 (1)

10

HN 1064

Ultramax

64,000

New Yangzijiang

China

April 2015 (1)

11

HN 1312

Capesize

180,000

SWS

China

April 2015 (1)

12

HN NE 167

Newcastlemax

209,000

NACKS

China

May 2015 (1)

13

HN 5040 (tbr Star Acquarius)

Ultramax

60,000

JMU

Japan

June 2015

14

HN 1313

Capesize

180,000

SWS

China

June 2015 (1)

15

HN 1338 (tbr Star Aries)

Capesize

180,000

SWS

China

June 2015 (1)

16

HN 1080

Ultramax

64,000

New Yangzijiang

China

July 2015

17

HN 5055

Capesize

182,000

JMU

Japan

July 2015

18

HN NE 184

Newcastlemax

209,000

NACKS

China

July 2015

19

HN 1372 (tbr Star Libra)

Newcastlemax

208,000

SWS

China

July 2015 (1)

20

HN 1081

Ultramax

64,000

New Yangzijiang

China

August 2015

21

HN 5056

Capesize

182,000

JMU

Japan

August 2015

22

HN 5043 (tbr Star Pisces)

Ultramax

60,000

JMU

Japan

September 2015

23

HN 1082

Ultramax

64,000

New Yangzijiang

China

September 2015

24

HN 1359

Newcastlemax

208,000

SWS

China

September 2015 (1)

25

HN NE 196 (tbr Star Antares)

Ultramax

61,000

NACKS

China

September 2015 (1)

26

HN NE 197 (tbr Star Lutas)

Ultramax

61,000

NACKS

China

October 2015 (1)

27

HN 1083

Ultramax

64,000

New Yangzijiang

China

November 2015

28

HN 1360

Newcastlemax

208,000

SWS

China

December 2015

29

HN 1339 (tbr Star Taurus)

Capesize

180,000

SWS

China

December 2015 (1)

30

HN 1371 (tbr Star Virgo)

Newcastlemax

208,000

SWS

China

December 2015 (1)

31

HN 1342 (tbr Star Gemini)

Newcastlemax

208,000

SWS

China

January 2016

32

HN 198 (tbr Star Poseidon)

Newcastlemax

209,000

NACKS

China

February 2016 (1)

33

HN 1361

Newcastlemax

208,000

SWS

China

March 2016 (1)

34

HN 1343 (tbr Star Leo)

Newcastlemax

208,000

SWS

China

April 2016

35

HN 1362

Newcastlemax

208,000

SWS

China

May 2016 (1)

36

HN 1363

Newcastlemax

208,000

SWS

China

June 2016 (1)

Total DWT:

5,214,160

(1)

The indicated expected delivery dates for the respective newbuilding vessels reflect delivery dates that are earlier than the respective contracted delivery dates.

Third Party Vessels Under Management (As of August 20, 2014)

Vessel Name

Type

DWT

Year Built

Marto (1)

Panamax

74,470

2001

Serenity I

Supramax

53,688

2006

Total

2

128,158

(1)

We received a notice of termination of the management agreement for this vessel. The management agreement will terminate upon the vessel's delivery to its new managers, which is expected to be in September of 2014.

Recent Developments

On July 11th, 2014 we completed a transaction in which we acquired Oceanbulk Shipping LLC ("Oceanbulk Shipping") and Oceanbulk Carriers LLC, ("Oceanbulk Carriers", and, together with Oceanbulk Shipping, "Oceanbulk") from Oaktree Dry Bulk Holdings LLC (including affiliated funds, "Oaktree") and Millennia Holdings LLC ("Millennia Holdings", and together with Oaktree, the "Sellers") through the merger of our wholly-owned subsidiaries into Oceanbulk's holding companies (the "Merger"). Millennia Holdings is an entity that is affiliated with the family of Mr. Petros Pappas, who became our Chief Executive Officer after the Merger. Oceanbulk owned and operated a fleet of 12 dry bulk carrier vessels and owned contracts for the construction of 25 newbuilding fuel-efficient Eco-type dry bulk vessels (one of which, the vessel Peloreus, was delivered on July 22, 2014) at shipyards in Japan and China.

The agreement governing the Merger also provides for the acquisition (the "Heron Transaction") of two Kamsarmax vessels (the "Heron Vessels"), from Heron Ventures Ltd. ("Heron"), a limited liability company incorporated in Malta. Star Bulk issued 2,115,706 of its common shares into escrow as consideration for the Heron Vessels. The common shares will be released from escrow to the sellers under the Merger Agreement at the time Heron distributes its vessels to its equity holders, whereupon the two Heron Vessels will be transferred to Star Bulk, and Star Bulk expects to pay $25.0 million in cash (for which it may seek financing).

In addition, concurrently with the Merger, we completed a transaction (the "Pappas Transaction"), in which we acquired all of the issued and outstanding shares of Dioriga Shipping Co. and Positive Shipping Company (collectively, the "Pappas Companies"), which were entities owned and controlled by affiliates of Mr. Petros Pappas (the "Pappas Shareholders"). The Pappas Companies owned and operated a dry bulk carrier vessel (Tsu Ebisu) and had a contract for the construction of a newbuilding dry bulk carrier vessel, HN 5016 (tbn Indomitable). Together, we refer to the Merger, the Heron Transaction and the Pappas Transaction as the "Transactions".

A total of 54,104,200 of our common shares were issued to the various selling parties in the Transactions, of which 45,460,324 shares were issued to Oaktree, and 8,643,876 were issued to the Pappas Shareholders. As a result, Oaktree became the beneficial owner of approximately 61.3% of our outstanding common shares, and the Pappas Shareholders became the beneficial owners of approximately 12.6% of our outstanding common shares. With certain limited exceptions, Oaktree effectively cannot vote more than 33% of our outstanding common shares (subject to adjustment under certain circumstances). The Pappas Shareholders are also subject to a similar voting limitation of 15%.

Through the Transactions, Star Bulk acquired an operating fleet of 15 dry bulk carrier vessels, with an average age of 5.6 years and an aggregate capacity of approximately 1.75 million dwt, including five Capesize vessels, two post-Panamax vessels, six Kamsarmax vessels and two Supramax vessels and contracts for the construction of 26 fuel-efficient, eco-design newbuilding dry bulk vessels including eight Newcastlemax vessels, eight Capesize vessels and ten Ultramax vessels, which will be built at shipyards in Japan and China. The newbuilding vessels are scheduled to be delivered in 2014, 2015 and 2016.

Furthermore, on July 16, 2014 we executed a binding term sheet with NIBC Bank N.V. ("NIBC") for a total amount of $32.0 million, related to post - delivery financing of two Ultramax vessels, under construction at Nachtong Cosco Kawasaki ("NACKS"), under HN 5040 & 5043. The facility is secured by first preferred mortgages on the two vessels, while it has a final maturity date set 6 years from the signing date.

In addition on July 31, 2014 we executed a binding term sheet with BNP Paribas ("BNP") for a total amount of $32.5 million, related to post - delivery financing of the Capesize vessel with HN 5016 (tbr " Indomitable"), under construction at Japan Marine United (" JMU" ). The facility is secured by a first preferred mortgage on the vessel, while it has a term of 5 years starting from the delivery date of the vessel.

On August 19th, 2014 we announced that we have entered into definitive agreements with Excel Maritime Carriers Ltd. ("Excel") pursuant to which we will acquire 34 operating vessels (the "Vessels"), consisting of 6 Capesize vessels, 14 sistership Kamsarmax vessels, 12 Panamax vessels and 2 Handymax vessels mainly built at shipyards in Japan, for an aggregate of 29.917 million shares of common stock of Star Bulk and $288.39 million in cash (the "Vessel Purchase Transactions"). The Vessels will be acquired in a series of closings which the Company expects to complete by the end of 2014. The closings are expected to occur on a vessel-by-vessel basis, in general upon reaching port after their current voyages and cargoes are discharged.

Second Quarter 2014 and 2013 Results (*)

(*)

Amounts relating to variations in period-on-period comparisons shown in this section are derived from the actual numbers in our books and records

For the second quarter of 2014, total voyage revenues amounted to $23.7 million compared to $17.1 million for the second quarter of 2013. This increase is mainly attributed to the increase of the average number of vessels to 17 in the second quarter of 2014 from 13.1 vessels in the second quarter of 2013.

Management fee income during the second quarter of 2014 increased to $1.1 million compared to $0.2 million during the second quarter of 2013, due to the increase in the average number of third and related party vessels under management to 15.6 vessels in the second quarter of 2014 from 3.6 vessels in the second quarter of 2013.

For the second quarter of 2014, operating loss amounted to $0.7 million compared to operating income of $2.3 million for the second quarter of 2013. Net loss for the second quarter of 2014, amounted to $3.0 million or $0.10 loss per basic and diluted share, calculated on 29,096,254 shares, which was the weighted average number of basic and diluted shares. Net income for the second quarter of 2013 amounted to $0.8 million, or $0.15 earnings per basic and diluted share, based on 5,422,143 and 5,453,488 weighted average number of shares, respectively.

Net loss for the second quarter of 2014 includes the following non-cash items:

Amortization of fair value of above market acquired time charters of $1.6 million, or $0.05 per basic and diluted share, associated with time charters attached to vessels acquired in the third quarter of 2011, namely Star Big and Star Mega, and which are amortized over their remaining period as a decrease to voyage revenues.

Expenses of $1.0 million, or $0.03 per basic and diluted share, relating to the stock based compensation expense recognized in connection with the shares issued to directors and employees.

Unrealized loss of $0.7 million, or $0.02 per basic and diluted share, in connection with the mark to market valuation of the Company's derivatives.

A loss on bad debts of $0.2 million or $0.01 per basic and diluted share associated with the write-off of disputed charterer balances.

In addition, net loss includes one off costs amounting to $2.4 million, or $0.08 per basic and diluted share in connection with the Transactions.

Excluding these non-cash items and the one off transactions costs, net income for the second quarter of 2014 would amount to $2.8 million, or $0.10 earnings per basic and diluted share.

Net income for the second quarter of 2013 includes the following non-cash items:

Amortization of fair value of above market acquired time charters of $1.6 million, or $0.29 per basic and diluted share, associated with time charters attached to vessels acquired in the third quarter of 2011, namely Star Big and Star Mega, and which are amortized over the remaining period as a decrease to voyage revenues.

Expenses of $0.6 million, or $0.10, per basic and diluted share, relating to the stock based compensation expense recognized in connection with the shares issued to directors and employees.

Loss on sale of vessel of $0.1 million or $0.01 per basic and diluted share in connection with the sale of Star Sigma, that concluded in March of 2013.

Unrealized gain of $0.4 million, or $0.08 per basic and diluted share, in connection with the mark to market valuation of the Company's derivatives.

Excluding these non-cash items, net income for the second quarter of 2013 would amount to $2.6 million, or $0.48 and $0.47 per basic and diluted share, respectively, based on 5,422,143 and 5,453,488 weighted average number of basic and diluted shares, respectively.

Adjusted EBITDA for the second quarter of 2014 and 2013, was $9.6 million and $8.4 million, respectively. A reconciliation of EBITDA and adjusted EBITDA to net cash provided by cash flows from operating activities is set forth below.

We owned and operated an average of 17.0 and 13.1 vessels during the second quarter of 2014 and 2013 respectively, which earned an average Time Charter Equivalent, or TCE daily rate of $14,018 and $14,273, respectively. We refer you to the information under the heading "Summary of Selected Data" below in this earnings release for information regarding our calculation of TCE rates.

For the second quarter of 2014, voyage expenses amounted to $5.3 million compared to $1.9 million for the second quarter of 2013. The increase in voyage expenses is mainly due to increase in voyage revenues and increased level of spot market activity during the second quarter of 2014 compared to the same period of 2013. Under voyage charter agreements all voyage costs are borne and paid by the owner, as opposed to time charter agreements where they are paid by the charterer. During the second quarter of 2014, we had our vessels under voyage charter agreements for 160 days while during the second quarter of 2013, we had one vessel under voyage charter agreement for 60 days. The revenue earned from the respective agreements for the second quarter of 2014 and 2013 amounted to $6.2 million and $1.2 million, respectively.

For the second quarter of 2014 and 2013, vessel operating expenses totalled $8.1 million and $6.8 million respectively. The increase in operating expenses is mainly due to the higher average number of vessels in the second quarter of 2014 compared to the second quarter of 2013. Our average daily operating expenses per vessel for the second quarter of 2014 were $5,208 versus $5,664 during the second quarter of 2014, representing an 8% reduction.

Dry-docking expenses for the second quarter of 2014 and 2013 amounted to $0.6 million and $0.3 million respectively. The amount of $0.6 million mainly consisted of the cost incurred during the second quarter of 2014 in respect of Star Epsilon which underwent its periodic dry-docking survey, in mid-March 2014. During the second quarter of 2013, none of our vessels underwent dry-docking surveys and the respective expenses related to advance payments for forthcoming dry docking surveys.

Depreciation expense increased to $5.1 million for the second quarter of 2014, compared to $3.9 million for the second quarter of 2013. The increase was due to the higher average number of vessels, in the second quarter of 2014, compared to the second quarter of 2013.

General and administrative expenses, for the second quarter of 2014 and 2013 amounted to $6.4 million and $2.6 million, respectively. This increase was attributable to:

a)

costs amounted to $2.4 million incurred during the second quarter of 2014, in connection with the Transactions concluded in July 2014

b)

higher stock based compensation expense by $0.5 million in the second quarter of 2014 compared to the same period in 2013, and

c)

the increase of average number of employees by 43% during the second quarter of 2014 compared to the to the same period in 2013, due to the increase in the average number of third and related party vessels under management to 15.6 vessels in the second quarter of 2014 from 3.6 vessels in the second quarter of 2013 and due to the increase in the average number of owned vessels in the second quarter of 2014 compared to the second quarter of 2013.

This translates into $1,288 average daily net cash G&A expenses per vessel in the second quarter of 2014, versus $1,477 average daily net cash G&A expenses per vessel in the second quarter of 2013.

Loss on bad debts totaled to $ 0.2 million for the second quarter of 2014, representing a write-off related to unpaid hire from charterers since we determined that such amounts were not recoverable. No loss on bad debts was recognized during the second quarter of 2013.

Other operational gain amounting to $0.2 million during the second quarter of 2014, mainly consisted of an amount received as rebate from our previous manning agent. Other operational gain during the second quarter of 2013, amounted to $0.8 million and represented the payment of installments due to us, under a settlement agreement, in connection to a commercial claim.

In September 2010, we signed an agreement to sell a 45% interest in the future proceeds related to the settlement of certain commercial claims. As a result, in connection to the settlement amount of $0.8 million described in other operational gain above, during the second quarter of 2013, we incurred an expense of $0.3 million, which is included under other operational loss.

For the second quarter of 2013, we recorded a loss on sale of vessel amounting to $0.1 million, which represented a loss on sale of vessel Star Sigma that concluded in March 2013. The vessel was delivered to her new owners in April 2013.

Loss on derivative financial instruments amounting to $0.7 million during the second quarter of 2014, represents the non-cash loss from the mark to market valuation of four interest rate swaps outstanding as of June 30, 2014. Gain on derivative financial instruments amounting to $0.4 million during the second quarter of 2013, represents the non-cash gain from the mark to market valuation of our two interest rate swap transactions that we had outstanding as of June 30, 2013.

For the second quarter of 2014, interest and finance costs decreased by $0.2 million to $1.7 million, compared to $1.9 million for the second quarter of 2013. Even though the weighted average loan balance has increased to $256.4 million for the second quarter of 2014 compared to $200.0 million for the second quarter of 2013 and the weighted average interest rates remain remained almost unchanged, interest and finance costs decreased mainly due to interest capitalized during the second quarter of 2014, amounting to $0.7 million, in relation to advances paid for our eleven newbuilding vessels.

First Half 2014 and 2013 Results (*)

(*) Amounts relating to variations in period-on-periodcomparisons shown in this section are derived from the actual numbers in our books and records

For the first half of 2014, total voyage revenues amounted to $43.1 million compared to $35.4 million for the first half of 2013. This increase is mainly attributed to the increase in the average number of vessels to 16.4 in the first half of 2014 from 13.6 vessels in the first half of 2013. Management fee income during the first half of 2014 increased to $1.9 million compared to $0.5 million during the first half of 2013, due to the increase in the average number of third and related party vessels under management to 13.7 vessels in the first half of 2014 from 3.4 vessels in the first half of 2013.

For the first half of 2014, operating loss amounted to $0.02 million compared to operating income of $5.2 for the first half of 2013. Net loss for the first half of 2014 amounted to $3.9 million, or $0.13 loss per basic and diluted share, calculated on 28,973,621 shares, which was the weighted average number of basic and diluted shares. Net income for the first half of 2013 amounted to $2.0 million, or $0.36 earnings per basic and diluted share, based on 5,414,998 and 5,443,639 weighted average number of shares, respectively.

Net loss for the first half of 2014 includes the following non-cash items:

Amortization of fair value of above market acquired time charters of $3.1 million, or $0.11 per basic and diluted share, associated with time charters attached to vessels acquired in the third quarter of 2011, namely Star Big and Star Mega, and which are amortized over their remaining period as a decrease to voyage revenues.

Expenses of $1.9 million, or $0.07 per basic and diluted share, relating to stock based compensation expense recognized in connection with the shares issued to directors and employees.

Unrealized loss of $0.8 million, or $0.03 per basic and diluted share, in connection with the mark to market valuation of the Company's derivatives.

A loss on bad debts of $0.2 million or $0.01 per basic and diluted share associated with the write-off of disputed charterer balances.

In addition, net loss for the first half of 2014 includes one off costs amounting to $2.4 million, or $0.08 per basic and diluted share in connection with the Transactions.

Excluding these non-cash items and the one off transaction costs, net income for the first half of 2014 would amount to $4.6 million, or $0.16 per basic and diluted share.

Net income for the first half of 2013 includes the following non-cash items:

Amortization of fair value of above market acquired time charters of $3.2 million, or $0.58 per basic and diluted share, associated with time charters attached to vessels acquired in the third quarter of 2011, namely Star Big and the Star Mega, and which are amortized over their remaining period as a decrease to voyage revenues.

Expenses of $0.6 million, or $0.11 per basic and diluted share, relating to stock based compensation expense recognized in connection with the shares issued to directors and employees.

Unrealized gain of $0.4 million, or $0.08 per basic and diluted share, in connection with the mark to market valuation of the Company's derivatives.

Loss on sale of vessel of $0.1 million or $0.01 per basic and diluted share in connection with the sale of Star Sigma, that concluded in March of 2013.

Excluding these non-cash items, net income for the first half of 2013 would amount to $5.4 million, or $0.99 and $0.98 per basic and diluted share, respectively.

Adjusted EBITDA for the first half of 2014 and 2013, was $17.4 million and $17.1 million, respectively. A reconciliation of EBITDA and adjusted EBITDA to net cash provided by cash flows from operating activities is set forth below.

We owned and operated an average of 16.4 and 13.6 vessels during the first half of 2014 and 2013, respectively, earning an average TCE rate of $14,172 and $14,301 per day, respectively. We refer you to the information under the heading "Summary of Selected Data" later in this earnings release for further information regarding our calculation of TCE rates.

For the first half of 2014, voyage expenses amounted to $7.7 million compared to $4.5 million for the first half of 2013. The increase in voyage expenses is mainly due to increased level of spot market activity during the first half of 2014 compared to the same period of 2013. Under voyage charter agreements, all voyage costs are borne and paid by us, as opposed to time charter agreements where they are paid by the charterer. During the first half of 2014, we had our vessels under voyage charter agreements for 173 days while during the first half of 2013, we had our vessels under voyage charter agreement for 149 days. The revenue earned from the respective agreements for the first half of 2014 and 2013 amounted to $7.0 million and $4.2 million, respectively.

For the first half of 2014, vessel operating expenses increased to $16.1 million compared to $13.7 million for the first half of 2013. The increase in operating expenses is mainly due to higher average number of vessels in the first half of 2014 compared to the same period in 2013. In addition, the vessel operating expenses of the first half of 2014 include an amount of $0.4 million related to one time, pre-delivery and pre-joining expenses incurred in connection with the delivery of Star Challenger, Star Fighter, Star Sirius and Star Vega. Pre-joining and pre-delivery expenses relate to expenses for the initial crew manning, as well as, the initial supply of stores for the vessel before its delivery. Excluding this amount, our average daily operating expenses per vessel for the first half of 2014 and 2013 amounted to $5,272 and $5,596, respectively, representing a 6% reduction.

Dry-docking expenses for the first half of 2014 and 2013 amounted to $1.3 million and $0.6 million respectively. The amount of $1.3 million mainly consisted of the cost incurred during the first half of 2014 in respect of Star Epsilon which underwent its periodic dry-docking survey, in mid-March 2014. During the first half of 2013, none of our vessels underwent dry-docking survey at yard and the respective expenses related to advance payments for forthcoming dry docking surveys.

Depreciation expense increased to $9.8 million for the first half of 2014, compared to $8.1 million for the first half of 2013. The increase was due to higher average number of vessels, in the first half of 2014, compared to the same period in 2013.

General and administrative expenses, for the first half of 2014 and 2013 amounted to $10.2 million and $4.7 million respectively. This increase was attributable to:

a)

costs amounting to $2.4 million incurred during the first half of 2014, in connection with the Transactions concluded in July 2014

b)

higher stock based compensation expense by $1.3 million in the first half of 2014 compared to the same period in 2013 and

c)

the increase of average number of employees by 38% during the first half of 2014 compared to the same period in 2013, due to the increase in the average number of third and related party vessels under management to 13.7 vessels in the first half of 2014 from 3.4 vessels in the first half of 2013 and due to the increase in the average number of owned vessels in the first half of 2014 compared to the same period in 2013.

This translates into $1,377 average daily net cash G&A expenses per vessel in the first half of 2014, versus $1,489 average daily net cash G&A expenses per vessel in the first half of 2013, a 7.5% decrease.

Loss on bad debts totaled to $ 0.2 million for the first half of 2014, representing a write-off related to unpaid hire from charterers since we determined that such amounts were not recoverable. No loss on bad debts was recognized during the first half of 2013.

Other operational gain amounting to $0.4 million during the first half of 2014, mainly consisted of $0.2 million received as rebate from our previous manning agent and a gain derived from a hull and machinery claim amounted to $0.2 million. Other operational gain amounting to $1.6 million during the first half of 2013 and mainly consisted of non-recurring revenue of $1.2 million, which represented the payment of installments due to us under settlement agreement for a commercial claim and a gain of $0.4 million regarding a hull and machinery claim.

For the first half of 2014, other operational loss amounted to $0.1 million. In September 2010, we signed an agreement to sell a 45% interest in the future proceeds related to the settlement of certain commercial claims. As a result, in connection to the settlement amount of $1.2 million described in other operational gain above, during the first half of 2013, we incurred an expense of $0.6 million which is included under other operational loss.

For the first half of 2013, loss on sale of vessel of $0.1 million represents a loss on sale of Star Sigma that concluded in March 2013 and the vessel was delivered to her new owners in April 2013.

Loss on derivative financial instruments amounting to $0.8 million during the first half of 2014, represents the non-cash loss from the mark to market valuation of four interest rate swaps outstanding as of June 30, 2014. Gain on derivative financial instruments amounting to $0.4 million during the first half of 2013, represents the non-cash gain from the mark to market valuation of two interest rate swaps outstanding as of June 30, 2013.

For the first half of 2014, interest and finance costs decreased by $0.7 million to $3.1 million, compared to $3.8 million for the first half of 2013. Even though the weighted average loan balance has increased to $234.8 million for the first half of 2014 compared to $206.6 million for the first half of 2013 and the weighted average interest rates remained almost unchanged, interest and finance costs decreased mainly due to interest capitalized during the first half of 2014, amounting to $1.3 million, in relation to advances paid for our eleven newbuilding vessels.

Liquidity and Capital Resources

Cash FlowsNet cash provided by operating activities for the first half of 2014 and 2013, were $10.4 million and $15.0 million, respectively. TCE rate for the first half of 2014 and 2013 was $14,172 and $14,301, respectively. Although the TCE rate has marginally decreased, the decrease in net cash provided by operating activities for the first half of 2014 of $4.6 million was a result of the following:

a)

recorded net loss amounting to $3.9 million for the first half of 2014 compared to net income of $2.0 million for the first half of 2013 and

b)

negative movement in working capital of $1.7 million during the first half of 2014 compared to positive movement of $1.6 million during the first half of 2013. Both voyage revenues and management fee income increased, due to higher average number of owned vessels, in first half of 2014 compared to first half of 2013.

In addition during the first half of 2014, we incurred one off costs amounting to $2.4 million, in connection with the Transactions.

Net cash used in investing activities for the first half of 2014 was $78.0 million. Net cash provided by investing activities for the first half of 2013 was $16.3 million. For the first half of 2014, net cash used in investing activities consisted of $74.3 million paid for advances for our eleven newbuilding vessels, acquisitions of second hand vessels and other fixed assets, $0.2 million paid to acquire 33% of the total outstanding common stock of Interchart Shipping Inc, a Liberian company that acts as a chartering broker to our fleet and a net increase of $4.1 million in restricted cash, offset by insurance proceeds amounting to $0.6 million. For the first half of 2013, net cash provided by investing activities consisted of $8.3 million representing proceeds from the sale of vessel Star Sigma, which concluded in March 2013 and under which the vessel was delivered to her new owners in April 2013, a decrease of $7.6 million in restricted cash, insurance proceeds amounting to $1.2 million and was offset by additions to vessels cost and other fixed assets amounting to $0.8 million.

Net cash provided by financing activities for the first half of 2014 was $62.6 million. Net cash used in financing activities for the first half of 2013 was $25.9 million. For the first half of 2014, net cash provided by financing activities consisted of loan proceeds amounting to $74.0 million, financing fees paid amounting to $0.9 million and loan installment payments amounting to $10.5 million. For the first half of 2013, net cash used in financing activities represented $25.6 million of loan installment payments and $0.3 million payment of financing fees.

Summary of Selected Data

(TCE rates expressed in U.S. dollars)

3 months ended

3 months ended

June 30, 2014

June 30, 2013

Average number of vessels (1)

17.0

13.1

Number of vessels (2)

17

13

Average age of operational fleet (in years) (3)

9.2

10.5

Ownership days (4)

1,547

1,194

Available days (5)

1,535

1,194

Voyage days for fleet (6)

1,426

1,178

Fleet utilization (7)

92.9

%

98.7

%

Average per-day TCE rate (8)

$

14,018

$

14,273

Average per day OPEX per vessel (9)

$

5,208

$

5,664

Average daily Net Cash G&A expenses per vessel (10)

$

1,288

$

1,477

6 months ended

6 months ended

June 30, 2014

June 30, 2013

Average number of vessels (1)

16.4

13.6

Number of vessels (2)

17

13

Average age of operational fleet (in years) (3)

9.2

10.5

Ownership days (4)

2,969

2,454

Available days (5)

2,939

2,454

Voyage days for fleet (6)

2,716

2,378

Fleet utilization (7)

92.4

%

96.9

%

Average per-day TCE rate (8)

$

14,172

$

14,301

Average per day OPEX per vessel (9)

$

5,410

$

5,596

Average daily Net Cash G&A expenses per vessel (10)

$

1,377

$

1,489

(1)

Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided, by the number of calendar days in that period.

(2)

As of the last day of the periods reported.

(3)

Average age of operational fleet is calculated as at June 30, 2014 and 2013, respectively.

(4)

Ownership days are the total calendar days each vessel in the fleet was owned by the Company for the relevant period.

(5)

Available days for the fleet are the ownership days after subtracting for off-hire days with major repairs, dry-docking or special or intermediate surveys.

(6)

Voyage days are the total days the vessels were in our possession for the relevant period after subtracting all off-hire days incurred for any reason (including off-hire for dry-docking, major repairs, special or intermediate surveys).

(7)

Fleet utilization is calculated by dividing voyage days by available days for the relevant period.

(8)

Represents the weighted average daily TCE rates, of our entire fleet. TCE rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses and amortization of fair value of above/below market acquired time charter agreements) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. We included TCE revenues, a non- GAAP measure, as it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.

(9)

Average daily OPEX per vessel is calculated by dividing Vessel operating expenses by ownership days.

(10)

Average daily Net Cash G&A expenses per vessel is calculated by deducting Management Fee Income from General and administrative expenses (net of stock based compensation expense one off transaction cost incurred in connection to the Merger) and then dividing with ownership days.

Unaudited Consolidated Condensed Statement of Operations

(Expressed in thousands of U.S. dollars except for share and per share data)

3 months ended June 30, 2014

3 months ended June 30, 2013

6 months ended June 30, 2014

6 months ended June 30, 2013

Revenues:

Voyage Revenues

23,683

17,132

43,064

35,362

Management Fee Income

1,063

247

1,861

456

Total revenues

24,746

17,379

44,925

35,818

Expenses:

Voyage expenses

(5,276

)

(1,902

)

(7,721

)

(4,505

)

Vessel operating expenses

(8,057

)

(6,763

)

(16,062

)

(13,732

)

Dry-docking expenses

(574

)

(300

)

(1,264

)

(572

)

Depreciation

(5,098

)

(3,917

)

(9,777

)

(8,070

)

Bad debt expense

(215

)

-

(215

)

-

General and administrative expenses

(6,425

)

(2,564

)

(10,215

)

(4,709

)

Other operational gain

238

750

407

1,647

Other operational loss

(4

)

(337

)

(94

)

(562

)

Loss on sale of vessel

-

(81

)

-

(81

)

Operating (loss) / income

(665

)

2,265

(16

)

5,234

Interest and finance costs

(1,694

)

(1,919

)

(3,057

)

(3,794

)

Interest and other income

32

22

21

86

(Loss) / Gain on derivative financial instruments

(661

)

438

(819

)

438

Total other expenses, net

(2,323

)

(1,459

)

(3,855

)

(3,270

)

(Loss) / income before equity in investee

(2,988

)

806

(3,871

)

1,964

Equity in (loss) / income of investee

(4

)

-

1

-

Net (loss) / income

(2,992

)

806

(3,870

)

1,964

(Loss) / earnings per share, basic

(0.10

)

0.15

(0.13

)

0.36

(Loss) / earnings per share, diluted

(0.10

)

0.15

(0.13

)

0.36

Weighted average number of shares outstanding, basic

29,096,254

5,422,143

28,973,621

5,414,998

Weighted average number of shares outstanding, diluted

29,096,254

5,453,488

28,973,621

5,443,639

Unaudited Consolidated Condensed Balance Sheets

(Expressed in thousands of U.S. dollars)

ASSETS

June 30,
2014

December 31,
2013

Cash and restricted cash *

41,862

46,160

Other current assets

14,533

8,269

TOTAL CURRENT ASSETS

56,395

54,429

Advances for vessels under construction and acquisition of vessels and other assets

81,794

67,932

Vessels and other fixed assets, net

377,302

326,674

Long-term investment

529

-

Restricted cash *

13,370

9,870

Fair value of above market acquired time charter

4,829

7,978

Other non-current assets

1,744

1,205

TOTAL ASSETS

535,963

468,088

Current portion of long-term debt

29,250

18,286

Other current liabilities

16,569

11,448

TOTAL CURRENT LIABILITIES

45,819

29,734

Long-term debt

224,632

172,048

Other non-current liabilities

1,045

200

TOTAL LIABILITIES

271,496

201,982

STOCKHOLDERS' EQUITY

264,467

266,106

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

535,963

468,088

*

As of June 30, 2014, we had $55,232 thousand in cash which included $39,420 thousand free cash and $15,812 thousand restricted cash. Restricted cash consisted of $7,312 thousand deposited in pledged accounts and $8,500 thousand free minimum liquidity required by our loan agreements.

Unaudited Cash Flow Data

(Expressed in thousands of U.S. dollars)

6 months ended June 30, 2014

6 months ended June 30, 2013

Net cash provided by operating activities

10,485

14,962

Net cash (used in) / provided by investing activities

(77,997

)

16,290

Net cash provided by / (used in) financing activities

62,634

(25,872

)

EBITDA and adjusted EBITDA Reconciliation

We consider EBITDA to represent net income before interest, income taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included herein because it is a basis upon which we assess our liquidity position, it is used by our lenders as a measure of our compliance with certain loan covenants and because we believe that it presents useful information to investors regarding our ability to service and/or incur indebtedness.

We excluded, non-cash loss related to sale of vessel, loss on bad debt, change in fair value of derivatives, stock-based compensation expense recognized during the period and one off items such as the transaction costs incurred in connection to the Merger, to derive adjusted EBITDA. We excluded the above non-cash items and one off items to derive adjusted EBITDA, because we believe that these items do not reflect the operational cash inflows and outflows of our fleet.

The following table reconciles net cash provided by operating activities to EBITDA and adjusted EBITDA:

(Expressed in thousands of U.S. dollars)

3 months ended June 30, 2014

3 months ended June 30, 2013

6 months ended June 30, 2014

6 months ended June 30, 2013

Net cash provided by operating activities

8,983

5,985

10,485

14,962

Net decrease / (increase) in current assets

556

717

6,793

(4,425

)

Net increase / (decrease) in operating liabilities, excluding current portion of long term debt

(3,880

)

(52

)

(5,238

)

2,785

Stock - based compensation

(1,006

)

(554

)

(1,903

)

(600

)

Change in fair value of derivatives

(661

)

438

(819

)

438

Total other expenses, net

1,506

1,751

2,752

3,416

Loss on sale of vessel

-

(81

)

-

(81

)

Loss on bad debt

(215

)

-

(215

)

-

Gain from Hull & Machinery claim

68

-

237

397

EBITDA

5,351

8,204

12,092

16,892

Less:

Change in fair value of derivatives

661

(438

)

819

(438

)

Plus:

Stock-based compensation

1,006

554

1,903

600

Loss on sale of vessel

-

81

-

81

Loss on bad debt

215

-

215

-

Transaction cost one off item

2,363

-

2,363

-

Adjusted EBITDA

9,596

8,401

17,392

17,135

Unaudited Pro Forma Condensed Combined Financial Statements

The Merger and the Pappas Transaction have been reflected in the unaudited pro forma condensed combined financial information as purchases of businesses pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 805, "Business Combinations" ("ASC Topic 805"). In addition, Star Bulk will purchase two vessels from the Heron (the "Heron Transaction"). The Heron Transaction has been reflected in the Pro Forma Adjustments in the unaudited pro forma condensed combined financial information as a purchase of assets.

The unaudited pro forma condensed combined balance sheet as of June 30, 2014 is presented in thousands of U.S. dollars and gives effect to the Merger, the Pappas Transaction and the Heron Transaction as if such transactions were consummated on June 30, 2014. The unaudited pro forma condensed combined statements of income for the six months ended June 30, 2014, are presented in thousands of U.S. dollars and give effect to the Merger and the Pappas Transaction as if such transactions closed on January 1, 2013.

These unaudited pro forma condensed combined financial statements are being presented for illustrative purposes only and, therefore, are not necessarily indicative of the financial position or results of operations that might have been achieved had the Pro Forma Transactions actually occurred on June 30, 2014 and January 1, 2013, respectively. They are not necessarily indicative of the results of operations or financial position of Star Bulk that may, or may not be expected to occur in the future. The unaudited pro forma condensed combined financial statements do not reflect any special items such as payments pursuant to change-of-control provisions or restructuring and integration costs that may be incurred as a result of the Pro Forma Transactions.

The following unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with Star Bulk's unaudited financial and operating results for the second quarter and first half of 2014, included in this press release above. The following unaudited pro forma condensed combined financial information has been prepared using the same methodology and assumptions as those included in the Unaudited Pro Forma Condensed Combined Financial Information of Star Bulk and Oceanbulk, filed with the SEC on August 6, 2014, on Form 6K, exhibit 99.2, updated with six months financial and operating results for all entities involved.

The cost of the acquisition of the Oceanbulk Companies and the Pappas Companies has been allocated to the estimated fair values of the identifiable assets and liabilities of the Oceanbulk Companies and the Pappas Companies pursuant to the acquisition method of accounting prescribed by ASC Topic 805, and is based on preliminary estimates of such respective fair values. The cost of the business combination and the cost of the Heron Transaction are based on the average closing market price of Star Bulk's common shares, as determined over a period of two trading days before and two trading days after, and inclusive, of July 11, 2014, (the "Market Price Per Common Share"). Accordingly, the purchase price allocation and resulting pro forma adjustments have been made solely for the purpose of preparing the unaudited pro forma condensed combined financial statements. As a consequence, the purchase price allocation is preliminary and subject to revision based on the finalization of the balance sheets of Oceanbulk and the Pappas Companies as of July 11, 2014.

Unaudited Pro Forma Consolidated Condensed Balance Sheets

AS OF JUNE 30, 2014

Starbulk Carriers

Oceanbulk

Pappas Companies

Pro forma Adjustments

Pro Forma

(in thousands of U.S. Dollars, except for share and per share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

39,420

89,793

849

$

(9,000

)

$

121,062

Restricted cash, current

2,442

191

-

2,633

Trade accounts receivable

4,211

5,184

827

10,222

Inventories

5,227

5,468

182

10,877

Due from managers

81

-

-

81

Due from related parties

1,953

29

-

(372

)

1,610

Prepaid expenses and other receivables

3,061

1,239

81

4,381

Deferred finance charges, net

-

712

42

(754

)

0

Total Current Assets

56,395

102,616

1,981

(10,126

)

150,866

FIXED ASSETS

Advances for vessels under construction and acquisition of vessels

81,794

142,705

14,854

183,604

422,957

Vessels and other fixed assets, net

377,302

315,977

31,038

78,985

803,302

Total Fixed Assets

459,096

458,682

45,892

262,589

1,226,259

OTHER NON-CURRENT ASSETS

Long term Investment

529

-

-

529

Convertible loans receivable

-

23,680

-

(23,680

)

0

Deferred finance charges, net

1,744

2,104

126

(2,230

)

1,744

Restricted cash, non-current

13,370

6,000

-

19,370

Fair value of above market acquired time charter

4,829

-

-

1,967

6,796

TOTAL ASSETS

$

535,963

593,082

47,999

$

228,520

$

1,405,564

LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Current portion of long term debt

$

29,250

17,451

1,400

$

48,101

Accounts payable

8,698

5,783

276

(2,034

)

12,723

Due to related parties

1,476

372

529

(372

)

2,005

Accrued liabilities

5,591

3,203

391

(1,713

)

7,472

Deferred revenue

804

1,120

97

2,021

Derivative liability

-

3,191

-

(155

)

3,036

Total Current Liabilities

45,819

31,120

2,693

(4,274

)

75,358

NON-CURRENT LIABILITIES

Long term debt

224,632

170,786

18,600

414,018

Derivative liability

728

2,835

-

(142

)

3,421

Other non-current liabilities

317

-

-

317

TOTAL LIABILITIES

271,496

204,741

21,293

(4,416

)

493,114

STOCKHOLDERS' EQUITY

Common Stock

295

-

-

541

836

Additional paid in capital

670,446

27,120

613,690

1,311,256

Members' Capital

-

415,037

-

(415,037

)

0

Accumulated other comprehensive loss

-

(3,454

)

-

3,454

0

Accumulated deficit

(406,274

)

(23,242

)

(414

)

30,288

(399,642

)

Total Stockholders' Equity

264,467

388,341

26,706

232,936

912,450

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

535,963

593,082

47,999

$

228,520

$

1,405,564

Unaudited Pro Forma Consolidated Condensed Statement of Operations

AS OF JUNE 30, 2014

Starbulk Carriers

Oceanbulk

Pappas Companies

Pro forma Adjustments

Pro Forma

(in thousands of U.S. Dollars, except for share and per share data)

Revenues:

Voyage revenues

$

43,064

29,713

692

$

(583

)

$

72,886

Management fee income

1,861

-

-

(1,299

)

562

44,925

29,713

692

(1,882

)

73,448

Expenses

Voyage expenses

7,721

10,490

(13

)

18,198

Vessel operating expenses

16,062

11,260

628

27,950

Dry docking expenses

1,264

914

-

2,178

Depreciation

9,777

5,235

202

2,295

17,509

General and administrative expenses

10,215

5,808

18

(3,747

)

12,294

Loss on bad debt

215

-

-

215

Management fees

-

1,353

(1,299

)

54

Other operational loss

94

-

-

94

Other operational gain

(407

)

-

-

(407

)

Operating (loss) / income

(16

)

(5,347

)

(143

)

869

(4,637

)

Other Income / (Expenses):

Interest and finance costs

(3,057

)

(2,383

)

(228

)

(5,668

)

Interest on Member's loan

-

(1,816

)

-

1,816

0

Loss on derivative financial instruments, net

(819

)

(1,149

)

-

(1,968

)

Interest and other income

21

(19

)

-

2

Total other expenses, net

(3,855

)

(5,367

)

(228

)

1,816

(7,634

)

(LOSS) / INCOME BEFORE EQUITY IN INCOME OF INVESTEE

(3,871

)

(10,714

)

(371

)

2,685

(12,271

)

Equity in income of investee

1

1

Net (Loss) / Income

$

(3,870

)

(10,714

)

(371

)

$

2,685

$

(12,270

)

(Loss) / earnings per share, basic

$

(0.13

)

$

(0.15

)

(Loss) / earnings per share, diluted

$

(0.13

)

$

(0.15

)

Weighted average number of shares outstanding, basic

28,973,621

83,077,821

Weighted average number of shares outstanding, diluted

28,973,621

83,077,821

Conference Call details:

Our management team will host a conference call to discuss our financial results today, August 20th at 11 a.m., Eastern Time (ET).

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or + (44) (0) 1452 542 301 (from outside the US). Please quote "Star Bulk."

A replay of the conference call will be available until August 27, 2014. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 3128607#.

Slides and audio webcast:

There will also be a simultaneous live webcast over the Internet, through the Star Bulk website (www.starbulk.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Star Bulk

Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk's vessels transport major bulks, which include iron ore, coal and grain and minor bulks which include bauxite, fertilizers and steel products. Star Bulk was incorporated in the Marshall Islands on December 13, 2006 and maintains executive offices in Athens, Greece. Its common stock trades on the Nasdaq Global Select Market under the symbol "SBLK". On a fully delivered basis, Star Bulk has a fleet of 103 vessels, with an aggregate capacity of 11.9 million, consisting primarily of Capesize, as well as, Kamsarmax, Panamax, Ultramax, Supramax and Handymax vessels with carrying capacities between 38,800 dwt and 209,000 dwt. With the addition of the two vessels to be acquired by us from Heron Ventures Ltd as well as the 34 vessels recently acquired, our fleet includes 67 operating vessels and 36 under construction at shipyards in Japan and China. All of the newbuilding vessels are expected to be delivered during 2014, 2015 and early 2016.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, examination by the Company's management of historical operating trends, data contained in its records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk shipping capacity, changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company's vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.